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Straits Times 3,160.72 -22.42 -0.70%
Hang Seng 27,267.13 -438.81 -1.58%
Dow Jones 25,490.47 -286.14 -1.11%
Shanghai Composite 2,852.52 -39.19 -1.36%
Asian Stocks Jump With China Rebounding From Three-Month Low
Aspire, Investments | 09 July 2015

Asian stocks advanced, with the regional benchmark index rebounding from its biggest decline in two years, as Chinese equities rose in volatile trading after the government ramped up measures to stem the equity rout.

Mainland brokerages Citic Securities Co. and China Galaxy Securities Co. gained for the first time in six days, surging more than 17 percent in Hong Kong. China Life Insurance Co. climbed 5.7 percent after UBS AG raised its rating on the nation’s largest insurer to buy from neutral. Korean Air Lines Co. dropped 5.5 percent in Seoul after shareholder Hanjin Transportation Co. failed to sell its entire stake in the carrier due to weak investor sentiment amid the China rout.

The MSCI Asia Pacific Index rose 0.8 percent to 140.73 as of 4:11 p.m. in Hong Kong, erasing an earlier losses of as much as 1.7 percent. China’s securities regulator banned major shareholders, corporate executives and directors from selling stakes in listed companies for six months, its latest effort to stem an equities slump that’s erased more than $3 trillion of value. The Shanghai Composite Index climbed 5.8 percent after dropping as much as 3.8 percent.

“Volatility will continue, but I suspect the panicky stage of the selloff in China’s share market has run its course,” said Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors Ltd. in Sydney. “So much panic and so much selling climax and washout and the market has only just come down to its 200-day moving average. These are desperate measures and it reflects the immaturity of the market.”

China’s measures are a sign of desperation and will fuel fear among investors, said Mark Mobius, executive chairman of the Templeton Emerging Markets Group.

Government Support

The Shanghai Composite slumped to a three-month low on Wednesday as another round of government support steps failed to allay concern that investors who borrowed to buy shares will keep unwinding those trades at a record pace. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong climbed 3.1 percent today, while the benchmark Hang Seng Index rose 3.7 percent, after falling the most since November 2008 on Wednesday.

Chinese inflation rose faster than economists forecast in June, suggesting a stabilization in demand that’s now threatened by the stock market’s rout. The Federal Reserve registered concern over China as early as last month, with meeting minutes signaling potential risks to the U.S. from there and Greece.

Japan’s Topix index slipped 0.2 percent, paring a decline of as much as 3.6 percent. New Zealand’s NZX 50 Index slid 0.5 percent. Australia’s S&P/ASX 200 Index closed little changed. Taiwan’s Taiex index lost 0.7 percent. Singapore’s Straits Times Index fell 0.3 percent. South Korea’s Kospi index rose 0.6 percent, reversing earlier losses of as much as 1.6 percent.

Greece Rushes

Greece is rushing to pull together a blueprint of reforms to convince European leaders headed by German Chancellor Angela Merkel that it can keep the euro. The government extended capital controls to Monday and Prime Minister Alexis Tsipras has until midnight Thursday to come up with an economic plan that will cut spending in exchange for a new European bailout.

E-mini futures on the Standard & Poor’s 500 Index gained 0.8 percent today. The underlying U.S. equity benchmark index sank 1.7 percent on Wednesday.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net Jim McDonald


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